How to depreciate a TM

[amygeorge]

What is the lifespan of a Truckmount? Need a depreciation schedule for insurance purposes. I talked to dealtime man and he said around 12,000 hours.

I have a Hydramaster Titan 575.

TIA,
Amy

 

[BIG WOOD]

I would value it at 600hrs per year for 20 years.

25000 divided by 20 years would be $1250 depreciated per year.

I came up with that all by myself. I'm a big boy now

 

[bob vawter]

if yor smart enough to convince them
that you burn up one a year cuz
yor to dum to run a bidness....... 1 year

caution: this may require some "acting" on yor part!

 

[Mikey P]

6-800 a year if you work all year long

 

[Lee Stockwell]

Half life of 4 years or slightly less, 3000 hrs.

Which would leave 25% value at 8 yrs/6000 hrs.

Depending on care and maintenance.

 

[smart n kleen]

Hopefully long enough to pay it off. lol

 

[amygeorge]

Half life of 4 years or slightly less, 3000 hrs.

Which would leave 25% value at 8 yrs/6000 hrs.

Depending on care and maintenance.

So, if you were me dealing with an adjuster that knows nothing about our industry equipment, would you say;

On average 8 years OR 8,000 hrs?
I would assume hours tell more of value than years. Some folks work all day, while others make the same money in 1/2 the time.

 

[Lee Stockwell]

It loses value more quickly up front, thus a curve.

If the mfg changes or orphans your model the drop in resale value will be quicker.

If the model gets a reputation for being less reliable or requiring more expensive maintenance its resale value will fall quicker.

In the end, calculating "depreciation" is only an accounting exercise to approximate how much of the original cost should be taken off the book (assets) each year.

 

[J Scott W]

For insurance purposes, a longer life expectancy is often better. I would think 600 to 800 hours a yearis reasonable for a rural area if used year round. 10,000 to 12,000 total hours of useful life over 15 or 16 years.

 

[J Scott W]

Accountants have several methods of depreciation. As Lee states, much of the value is lost up front. Great if you want to deduct more from your taxes. Not so great if they are figuring what your 1 or 2 year old truckmount is worth after an accident. You don't want too much deducted up front. That lowers the worth at some point you might need insurance coverage.

I would go with a straight line method. Depreciate 6 to 8% per year.

 

[dealtimeman]

10 to 12 thousand on a water cooled unit like the nissans and kubotas is what I believe is expected.

I've seen a lot of peaks with over 8000 hours on them.

 

[Andy]

For insurance look at different sites that have used truckmounts for sale and run some comparisons.

 

[SamIam]

Did you ask @John Olson ?